Producers Price Index : May 2020

Reference Number: 

2020-120

Release Date: 

Tuesday, June 30, 2020
 
 
 

 

Year-on-Year

The Producer Price Index (PPI, 2000=100) for manufacturing continued to drop with an annual rate of -3.1 percent in May 2020. In the previous month, it declined at a faster rate of 3.3 percent. On the other hand, the PPI in May 2019 increased at an annual rate of 1.0 percent. (Table A)

The downtrend in PPI in May 2020 can be attributed to the decreases in the indices of 14 industry groups with leather products (-12.2%) and wood and wood products (-10.5%) posting double-digit decrements.

In contrast, furniture and fixtures, which increased by 21.4 percent, led the six industry groups that posted annual increments. (Tables A-1 and 1)

 

Month-on-Month

On a month-on-month basis, the PPI posted a slight decrement of 0.5 percent in May 2020, the same trend recorded in April 2020 with 0.6 percent and in May 2019 with 0.7 percent. (Table A)

Nine industry groups posted negative monthly growth rates in May 2020 with electrical machinery posting the highest monthly decrement of 5.3 percent. Furthermore, PPI for eight industry groups posted monthly increments while the rest had zero monthly growth rates. (Tables A-2 and 1)

 

 

 
 

 

 

(Sgd.) CLAIRE DENNIS S. MAPA, Ph.D.
Undersecretary
National Statistician and Civil Registrar General

 
 
 
 
 

 
 
Technical Notes
 
  • Introduction
The Philippine Statistics Authority generates various price indices, one of which is the Producer Price Index (PPI). The PPI is generated from the results of the Producer Price Survey (PPS) which is conducted nationwide. The survey gathers monthly producer prices of selected products included in the market basket of PPI from sample establishments.
 
The PPI is used as a deflator of the Monthly Integrated Survey of Selected Industries (MISSI) to derive indicators for the Volume of Production Index (VoPI) and Volume of Net Sales (VoNSI).
 
  • Method of Index Computation
PPI utilizes the Paasche-type method of index computation. The weights are computed from the value of production from the Census of Philippine Business and Industry (CPBI) or Annual Survey of Philippine Business and Industry (ASPBI). The weights are updated as soon as new results of the ASPBI or CPBI are available and these are applied at the beginning of each survey year.
 
For the 2020 PPI, the weights of the major industry groups and industry sub-classes were computed based on the final results of the 2017 ASPBI for Manufacturing establishments with total employment of 20 and over.
 
The computation of PPI adopts the following formula:
 
 
 

Note:

Starting with January 2017 PPI, a link factor has been used to adjust weight effects to measure the correct price change.

 

  • Computation of Growth Rates

Year-on-year growth rates are computed by dividing the current month index by the index in the same month of the previous year less 1.

Month-on-month growth rates are computed by dividing the current month index by the previous month’s index less 1.

 
  • Imputation and Revision

Imputation is done for sample establishments that are in operation during the reference period but no received response during the release date. Results are revised accordingly when the actual data are received and these revisions are reflected in the next release.

 

  • Industry Coverage

Starting with the January 2013 reference month, the PPI utilizes the 2009 Philippine Standard Industrial Classification (PSIC) to classify sectors and industries. Selected industry classes of the 2009 PSIC were grouped to form the 20 major industry groupings of the 2020 PPS. These are presented in the table below.

2009 PSIC CODE

INDUSTRY DESCRIPTION

C10

Food manufacturing *

C11

Beverages

C12

Tobacco products

C13

Textiles*

C14, C152

Footwear and wearing apparel

C151

Leather products

C16

Wood and wood products*

C17

Paper and paper products

C18

Printing

C19

Petroleum products*

C20, C21

Chemical products*

C22

Rubber and plastic products*

C23

Non-metallic mineral products*

C24

Basic Metals*

C25

Fabricated metal products

C262, C275, C28, C263, C268

Machinery except electrical*

C261, C264, C27, C29301

Electrical machinery*

C29 except C29301, C30

Transport equipment

C31

Furniture and fixtures

C265, C266, C267, C32

Miscellaneous manufactures

* - Industry groups categorized into industry classes

 

 

See more at the Producer Price Survey (PPS) main page.

 

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